The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Tyson Foods (TSN). TSN is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
We also note that TSN holds a PEG ratio of 0.70. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TSN's industry currently sports an average PEG of 1.49. Within the past year, TSN's PEG has been as high as 0.94 and as low as 0.30, with a median of 0.72.
Another valuation metric that we should highlight is TSN's P/B ratio of 1.03. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.50. Within the past 52 weeks, TSN's P/B has been as high as 1.24 and as low as 1.01, with a median of 1.11.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TSN has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.62.
Finally, our model also underscores that TSN has a P/CF ratio of 7.77. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. TSN's P/CF compares to its industry's average P/CF of 9.09. Over the past year, TSN's P/CF has been as high as 12.12 and as low as 7.59, with a median of 8.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tyson Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TSN feels like a great value stock at the moment.
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Tyson Foods, Inc. (TSN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).